Nicor employees warn of post-merger layoffs

(Crain's) — Whistle-blowers at Nicor Inc. allege that Atlanta-based AGL Resources Inc. plans to cut jobs at the Naperville-based gas utility despite promises it's made to keep staffing levels steady for at least three years.

Two letters from unnamed Nicor employees sent in recent weeks to the Illinois Commerce Commission claim that AGL has informed some Nicor workers that they will not be kept on once the $2.6-billion deal is finalized. The ICC must sign off on the acquisition and has until December to reach a decision.

AGL publicly pledged when it agreed to buy Nicor that it wouldn't cut employees at Nicor Gas for at least three years and to preserve current charitable giving levels for that period.

A June 28 letter to the ICC by a group that called itself “Nicor Integration Team Employees” said that AGL's consultants told members of the group that the company would make $60 million on the deal and that the profits would come “through the consolidation of Nicor jobs.”

“We know it's true because many Nicor employees have already been told by AGL that they will not be retained once the merger is approved,” the letter said.

In response, AGL said in an emailed statement, “The letters contain several inaccuracies and make a number of unfounded assertions which are inconsistent with previous testimony of senior officers of both companies.”

The statement reiterated the company will maintain “for a period of three years after the close of the proposed merger the number of full-time equivalent employees involved in the operation of the natural gas distribution business of Nicor Gas.” AGL also said it recently reached an agreement with ICC staff not to cut staffing levels for five years “in specific areas of oversight of the Nicor Gas system.”

Asked, though, if it would agree to make those pledges an explicit condition of approval of the deal by the ICC and subject itself to penalties for non-compliance, AGL wouldn't say one way or the other. Instead, it responded in a separate emailed statement: “The ICC has full authority and jurisdiction over the merger approval as it relates to Nicor Gas and its operations, and its oversight of Nicor Gas will continue after the close of the transaction. AGL Resources will continue to work cooperatively with the ICC throughout the approval process.”

AGL's promise to preserve Nicor jobs was in lieu of reducing rates paid by Nicor's 2.2 million suburban customers, often a prerequisite of utility mergers. In testimony, ICC staff has taken the position that AGL should pass along any cost savings in Nicor operations to Nicor customers.